“engaged scholarship, reflective practice” leveraging anchor institutions for local job creation...
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“Engaged Scholarship, Reflective Practice”
Leveraging Anchor Institutions for Local Job Creation and Wealth Building
Ted HowardThe Democracy Collaborative
June 16, 2011
“Engaged Scholarship, Reflective Practice”
What is an Anchor Institution?
Sticky capital” that doesn’t get up and leave Local economic engines Typically among the largest employers in most
major metropolitan areas Purchase large amounts of goods & services Vested interest in surrounding communities Typically non-profit with public mission; not
outside investor-driven Largely untapped potential
“Engaged Scholarship, Reflective Practice”
Types of Anchor Institutions
UniversitiesHospitals and nursing homesMuseumsPerforming Arts CentersOther cultural institutions (theaters, zoos, etc.)Churches/Mosques/Temples/SynagoguesLocal philanthropy (community foundations, etc.)Municipal utilitiesCity government
“Engaged Scholarship, Reflective Practice”
Economic Impact of Anchor Institutions
Employment: 20 largest US cities: universities and hospitals account for 35 percent of the
workforce employed by the top 10 private employers Universities employ more than 2 million full-time workers and 1 million part-
time workers; Hospitals more than 5 million employees 5% of all US workforce
Procurement: Universities: $400 billion annually Hospitals: >$600 billion annually
Endowments total close to $1 trillion 4,000+ colleges and universities 6,000+ hospitals
“Engaged Scholarship, Reflective Practice”
One Measureof Local Economic Impact
In 1996, the latest year for which data is available, the more than 1,900 urban-core universities spent $136 billion on salaries, goods, and services—nine times greater than federal direct spending on urban business and job development in the same year.
- Michael Porter, Harvard Business School, 2002
“Engaged Scholarship, Reflective Practice”
Anchor Local Procurement & Hiring Strategies
University of Pennsylvania (Philadelphia) A comprehensive effort targeted at West Philadelphia neighborhood Increased local purchasing from $1.3M to >$100M Spurring >$400M in new private investment 190 additional local jobs; $6 million in local wages
University of Southern California (L.A.) Targeted hiring in 3 zip codes near campus
Health Alliance (Cincinnati, OH) Set and exceeded a $23 million target for purchasing from local minority suppliers
Henry Ford Hospital (Detroit) Incentivized local hiring (7% of exec bonuses linked to these goals) "Live Local, Buy Local, Hire Local" initiative; $400,000 to date
University Hospitals (Cleveland) Doubled its spend in Cleveland in last three years 91% of construction purchasing ($1B project) sourced locally
“Engaged Scholarship, Reflective Practice”
Anchor Endowment Local Investment Strategies
University City Use of Endowment Amount
Clark Worcester, MA Education/Community building $7M
Duke Durham, NC Latino credit union finance $5M
Harvard Cambridge, MA Affordable housing loan fund $20M
Ohio State Columbus, OH Mixed-use development $28M
Trinity Hartford, CT Education/Community building $5.9M
U. of Cincinnati Cincinnati, OH Mixed use development $148.6M
“Engaged Scholarship, Reflective Practice”
BUILDING COMMUNITY WEALTH TOTRANSFORM CLEVELAND AND CHANGE LIVES
EVERGREEN COOPERATIVE INITIATIVE
Create Jobs Generate Wealth for Residents
Stabilize Neighborhoods
“Engaged Scholarship, Reflective Practice”
• How do we create good quality jobs at a time of growing job dislocation and disinvestment in our urban areas?
• How do we anchor capital so that it doesn’t get up and leave?• How do we stop money from leaking out of our area?• How do we turn the vision and promise of green jobs into real
employment opportunities that are available to urban workers today?
• How do we stabilize and revitalize disinvested neighborhoods?
Issues we seek to address:
“Engaged Scholarship, Reflective Practice”
Cleveland Clinic
4. Cleveland Museum of Art Veteran’s Affairs Medical Center
University Hospitals
ANCHOR PARTNERS
“Engaged Scholarship, Reflective Practice”
Our Strategy
1. Focus anchor institution purchasing locally(big 3 represent $3 billion annually)
2. Create new community-based businesses
3. GREEN
4. Link to expanding sectors of the economy (e.g., health, aging, energy, food, waste & green technologies)
5. Access to low-cost capital for local business development
“Engaged Scholarship, Reflective Practice”
Design Criteria For-profit Hire locally & located in community Matched to anchor needs Living wage + benefits Green Employee-owned (worker cooperatives) % of profits to help start new businesses in the
community (social mission)
“Engaged Scholarship, Reflective Practice”
Create new jobs for neighborhood residents500 > 5,000
Anchor capital so it doesn’t get up and leave Promote asset accumulation ($65K/8 years) Stop $$ from leaking out of NE Ohio Stabilize and revitalize neighborhoods Develop a replicable model for national impact
Goals
“Engaged Scholarship, Reflective Practice”
Saturation Strategy
Systematic attempt to shift procurement and investment among many local anchors for a municipal-wide job creation impact
By way of example, in Cleveland: 62 hospitals 200+ nursing and retirement homes 20+ universities and colleges 3 sports teams Municipal and county governments Cleveland Public Power utility Cleveland Port Rapid Transit Authority Cleveland Foundation ($2 billion in assets) and other local
philanthropy
“Engaged Scholarship, Reflective Practice”
National Trends Among AnchorsThat Support Localizing
Growing recognition that fate of the institution is tied to health, safety, vitality of neighborhoods; not just in principle, but as it effects anchor business model
Institutional “greening” = go local Post-Katrina security concerns PILOTs, Senator Grassley, etc. Mission-related endowment movement (both pressure
and demonstrated MRI success) Health care costs of uninsured